Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Perhaps, economics isn’t so bad after all. I often have criticized old-line economists for not recognizing the absolute facts that:
1. Federal spending is constrained only by inflation. Taxes and borrowing do not support the spending by a Monetarily Sovereign nation. Even were taxes and borrowing to be completely eliminated, this would not affect the federal government’s ability to spend.
2. The federal government is not, and never can be, “broke.” Neither today’s taxpayers, nor future generations, ever will pay for today’s federal debt.
3. No amount of federal debt is “unsustainable.” The government can service any amount of debt at any time.
4. A growing economy requires a growing supply of money. Federal deficit spending is the government’s method for adding growth money to the economy. Reductions in federal deficit growth lead to recessions and depressions.
I have criticized mainstream economics as being akin to a religion, relying on faith and authority, rather than on fact. Well, perhaps economics is not alone.
Background: Biological evolution relies on natural selection (popularly known as “survival of the fittest”), in which better suited individual entities survive. These better suited entities pass their genes on, while unsuited entities do not.
The sticking point is that natural selection does not explain altruism. Just two examples among humans: Care for the elderly and heroic soldiers. In fact, human morality is based on altruism. But how does this benefit the individual?
One would think that over time, any leaning toward altruism would be bred out, since the altruistic individuals, by giving their lives or even by sharing their food, time or attention, sacrifice some of their chances to pass on their genes. Yet, nature offers numerous examples of altruism — even among unrelated individuals — in species from the lowest bacterium to the highest life forms.
A solution to the problem is called “group selection,” in which entire groups, receiving the benefits provided by altruistic individuals, are more able to pass on their genes. This solution was rejected for many years, by mainstream biologists. Here is an excerpt from the August 6, 2011,New Scientist magazine:
Today, there is near-universal agreement among those familiar with the subject that the wholesale rejection of “group selection” was mistaken and that the so-called alternatives are nothing of the sort. Some, such as William Hamilton, reached this conclusion as early as the 1970′s, but decades were required for others to follow suit.
However, many people who do not directly study the subject, including many biologists, have got the impression that group selection was conclusively disproved and that nothing has changed since. As a result, there is widespread confusion.
The new consensus states definitively that the individual organism is not a privileged level of the biological hierarchy.
Sound familiar? A long-held belief, by mainstream scientists, many of them Nobel prize winners, now has been disproved. Yet despite massive evidence, the public, and even many of the old-line scientists, cling to the old view.
Change a few words, and this article could be talking about the public and old-line economists not recognizing the truths of Monetary Sovereignty.
Yes, maybe economics isn’t so bad after all. By coincidence, William Hamilton proposed “group selection” in the 1970′s and the U.S. became Monetarily Sovereign in 1971. Now that biologists are coming around to the facts, perhaps economists soon will follow.
Could four decades be the magic number for turning that lumbering ship known as “science”?
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings